The price of oil jumped $4.58 a barrel yesterday. The WSJ reports, “Futures rebounded Wednesday as an unexpected, 3.5 million-barrel drawdown in gasoline stocks for the week ended July 25 highlighted the resilience of U.S. demand.” Sorry, I don’t buy this story. Gasoline demand is falling in the US and the global economy is getting weaker. The supply of oil is plentiful right now. I believe that the swings in the price of oil in coming days and weeks will be driven by speculators in the Middle East who might be in a much better position to assess the odds of a confrontation in the Strait of Hormuz. I doubt the US would blockade Iran’s exports of crude oil. But the Iranians might retaliate, for either sanction on their gasoline imports or an actual blockade, by cutting off their exports of oil anyway, though I doubt it. I also doubt that they would take on a US naval blockade.